Correlation Between Luminar Technologies and Kongsberg Automotive
Can any of the company-specific risk be diversified away by investing in both Luminar Technologies and Kongsberg Automotive at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Luminar Technologies and Kongsberg Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luminar Technologies and Kongsberg Automotive ASA, you can compare the effects of market volatilities on Luminar Technologies and Kongsberg Automotive and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Luminar Technologies with a short position of Kongsberg Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luminar Technologies and Kongsberg Automotive.
Diversification Opportunities for Luminar Technologies and Kongsberg Automotive
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Luminar and Kongsberg is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Luminar Technologies and Kongsberg Automotive ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kongsberg Automotive ASA and Luminar Technologies is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Luminar Technologies are associated (or correlated) with Kongsberg Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kongsberg Automotive ASA has no effect on the direction of Luminar Technologies i.e., Luminar Technologies and Kongsberg Automotive go up and down completely randomly.
Pair Corralation between Luminar Technologies and Kongsberg Automotive
If you would invest 784.00 in Luminar Technologies on October 9, 2024 and sell it today you would earn a total of 64.00 from holding Luminar Technologies or generate 8.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luminar Technologies vs. Kongsberg Automotive ASA
Performance |
| Timeline |
| Luminar Technologies |
| Kongsberg Automotive ASA |
Luminar Technologies and Kongsberg Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luminar Technologies and Kongsberg Automotive
The main advantage of trading using opposite Luminar Technologies and Kongsberg Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luminar Technologies position performs unexpectedly, Kongsberg Automotive can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Kongsberg Automotive will offset losses from the drop in Kongsberg Automotive's long position.| Luminar Technologies vs. Mobileye Global Class | Luminar Technologies vs. Hyliion Holdings Corp | Luminar Technologies vs. Aeva Technologies | Luminar Technologies vs. Innoviz Technologies |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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